When starting a tech company, it can be tempting to make venture capital a priority, but finding it shouldn’t be what drives your business decisions. I knew I wanted to bootstrap my business, BuySellAds, so that I could follow my own goals. By following these next few tips, I was able to achieve success for my business without raising VC money. Here’s how you can too:
1. Don’t Quit Your Day Job
You might think you only need 40 hours a week to go from ideation to a living, breathing product or service, but it’s simply not true. Working nights and weekends will help you prove to both yourself and your loved ones that you want it badly enough.
Keeping your day job not only helps you maintain your lifestyle, but it helps you funnel every last dollar your company earns into growing your product. Keeping your day job means you can pay yourself first, and move financial resources into your project.
I launched BuySellAds in February 2008, and I didn’t leave my job at HubSpot until that December. Despite early success, initial traction and a $1 million run rate in sales within our first four months, I stuck with my current job until I could pay myself and afford to hire staff.
2. Test the Market
Before I spent a single minute building the BuySellAds platform, I designed a landing page that pitched the idea of an advertising marketplace. It included a basic lead form and asked interested parties to register for more information and details once we launched the company.
Once the landing page was live, I purchased a series of ads on websites for my target audience. The conversion rate from clicks to email signups was quite good (around 7% if I recall, which is almost unheard of on today’s conversion-hungry internet). I would then research the email accounts of those who signed up, look up domain names by searching WHOIS records, and determine if the lead was legitimate or just someone kicking tires.
A one-page product teaser validated my idea. It gave me enough confidence to take the next step. Using this method, I was able to uncover market potential a full year before I launched the first version of our platform.
3. Plan to Wear a Lot of Hats in the Beginning
Early on, you’ll have delusions of grandeur. You’ll fantasize about large offices and a huge workforce working on your project. It’s normal, and it’s healthy. Visualizing what the future looks like is a fantastic way to meditate, but in the beginning, you need to fight the desire to burn cash. Keep your team small until you can’t physically survive without expanding your team.
A second or third developer may be nice, but the more people you add to your company, the more your role will shift from “getting things done” mode to management mode. If you grow too fast, you’ll be spending more money on embedding managers into your project, and less money on tackling your core problems.
It’s a hard urge to fight; I would know.
4. Prioritize Hires
The moment you find a salesperson who’s also proficient in Photoshop, cascading style sheets and PHP, hire that person immediately. Well-rounded employees with a vast array of skills are worth their weight in gold. Early on, it’s often better to hire a master of some than a master of one, especially in the moments directly succeeding your market testing.
Of course as you grow, specialization will become more valuable than versatility. But in the early days, you need people to roll up their sleeves and push stuff across the finish line.
5. Find People on the Rise
Find people who are close to outperforming their current roles at other companies. Hiring those who are almost ready to take the next step in their careers is a fantastic way to stretch your dollar. If you can polish this skill, you’ll have a small team that is seriously outperforming its compensation.
The key here, however, is to give them the time, attention and respect they need to help them upgrade their skills. Of course, paying them fairly is tantamount to maintaining a positive relationship. Once you can agree on fair compensation, stand back and watch them blossom.
6. Don’t Take ‘No’ for an Answer
You may often find yourself saying “no” to spending money, but when it comes to closing your early deals, never take no for an answer. Do everything you can to make it work and still come in under budget.
By treating every paying customer as your first, last and only, you’ll be setting a precedent for perfection across your entire team. Without customers, you’ll never be successful. Convince early prospects that you’re worth taking a chance on, and help them see that they’re betting on a sure thing.
7. Try Lots of Ideas, but Kill Underwhelming Ones Quickly
You may want to say “yes” to a few bold ideas, but quickly decide whether or not they’re working out. There’s also nothing wrong with canning ideas for the future and acting on them once they start eating at your brain. Just make sure you’re collecting enough valuable data to make educated decisions. If the numbers aren’t adding up, kill an idea.
The key is to realize that doing anything by committee will ultimately drag out the completion process. As a startup without venture capital funding, that means burning through your financial reserves. Make a decision on projects quickly. Get your project wrapped up, or move on to the next one. Iterate where it makes sense.
BusinessCollective, launched in partnership with Citi, is a virtual mentorship program powered by North America’s most ambitious young thought leaders, entrepreneurs, executives and small business owners.